Endogenous Behaviour of the Tariff Rate in a Political Economy
How would the tariff rate in a political economy respond to changes in exogenous environment? To answer this question a bargain-theoretic approach is adopted and a tariff-endogenous general equilibrium model of a small open political economy is derived. A comparative static analysis of the model shows that the bargained tariff rate changes to compensate, at least in part, for the relative loss of the loser arising from changes in the exogenous environment - be it the domestic factor endowment or the international terms of trade
|Date of creation:||30 Sep 1996|
|Date of revision:||01 Oct 1996|
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